Scanning the weekly flyers and clipping coupons is a great Canadian tradition but, like the landline telephone, VCRs and analog TV, coupons and flyers are on their way out. Retailers are moving online and developing smart phone applications to get more personal with their offers.
Rapid advances in technology, coupled with the rise of social media, has given retailers unprecedented insight into consumer behaviour – information that’s used to offer tailor-made discounts based on their spending habits.
Related: Why Aeroplan members are fed up with their rewards program
“It’s a fine line between cool and creepy,” said Jonathan Bishop, an analyst with the Public Interest Advocacy Centre a non-profit consumer advocacy group based in Ottawa. “You have to be aware that in exchange for a small reward you’re giving up a lot of personal info.”
Shaping consumer behaviour
The benefits to consumers are rewards and discounts sent straight to your smart phone. It’s an easy way to save money. The trade-off is that you give up privacy and you may not be sure how much and whether the retailer is selling the information to a third party.
By signing up, you agree to let the retailer capture your habits and the details of what you are buying. They’ll try to get you to spend more by offering deals based on your habits.
Many retailers are already doing this, including Loblaws, Shoppers Drug Mart, Hudson’s Bay Company, Safeway, and Shell Canada. Even Canadian Tire is looking at how it can join the online loyalty world, even though it has no plans to get rid of its iconic paper currency.
Related: How to swap points from one rewards program to another
Loblaws launched a new digital loyalty program called PC Plus in 2013. It targets customers based on their purchase histories, offering discounts on items they buy regularly. Uwe Stueckmann, senior vice-president at Loblaw Companies says PC Plus isn’t an attempt to change customers’ food preferences.
“We want to reward them for the brand that they already buy,” he said.
But the application goes further by providing dinner suggestions and offering bigger discounts on products consumers might be interested in, but need some incentive to try.
A new take on consumer loyalty
Grocery loyalty programs have been around for 20 plus years, since the launch of Tesco’s program in the United Kingdom. The programs haven’t changed much – customers get a plastic card and weekly flyers that encourage them to shop with the retailer
In April, Canada Safeway discontinued its Club Card program so that customers no longer have to carry a loyalty card or give their phone number to get the best prices in-store. Now they get it automatically. The grocery store continues to offer Air Miles and sends weekly printable coupons to customers through a program called Safeway eMail Direct.
Related: Bonus Air Miles or Percentage off Groceries?
PIACs Bishop says Air Miles has an enormous amount of data on consumer shopping habits, which is shared with partners like Safeway to use for direct and in-store marketing.
Air Miles went through its own transition two years ago when the company introduced Air Miles Cash. This feature allows collectors to redeem miles in $10 increments at the cash register for groceries and gas.
A new e-Voucher program lets Air Miles collectors use their smartphone to get $10 off at retailers like Cineplex, Starbucks, and iTunes.
The new program is clearly aimed at Millennials, who want ways to use their reward miles for instant gratification.
“There’s no waiting for a reward to arrive in the mail.” said, Andy Wright, Air Miles president, adding that 2 million Air Miles collectors use the cash feature.
The granddaddy of all loyalty programs, Canadian Tire Money, might prove that you don’t need a plastic card or a smart phone to gain customer affinity. How else can you describe a program that, according to Moody’s Investor Services, is so well accepted among retailers that it could almost be considered an unofficial currency?
But even Canadian Tire is thinking about change. The retail giant has been testing a plastic card in Nova Scotia that customers can use to collect points.
Related: The new Canadian Tire Money Advantage rewards
Erin Sufrin, a spokesperson for Canadian Tire, says the retailer is happy with the pilot project but, given the affinity for Canadian Tire Money, the paper money is definitely not going away.
“Any evolution to our loyalty program will co-exist in parallel with our paper money,” she said.
Final thoughts
Canadian Tire Money aside, the future of customer loyalty is directly tied to digital adoption. Already, marketers and retailers are moving from a traditional model to a digital model just to keep up with consumers. The trick will be to integrate the technology in a way that doesn’t cross the line when it comes to privacy.
How do you feel about retailers sending you personalized offers based on your shopping habits? Is it creepy, or cool?
I used to be a big-time Air Miles collector – taking advantage of bonus offers at Safeway, double-dipping with an Air Miles credit card, and then redeeming miles for $20 Shell gas gift certificates. But ever since Air Miles devalued its program by increasing the amount of miles needed to get rewards, I’ve barely used my card.
Related: New Air Miles Expiry Policy
It used to cost 170 Air Miles to get a $20 gift certificate. Now with the Air Miles Cash feature it costs 95 Air Miles for $10 off at the cash register. The 11 percent reduction in value was somewhat justified because instead of waiting 4-6 weeks for a reward to arrive in the mail, you could redeem your miles instantly at the retailer.
The problem for me was that none of the Shell gas stations in my city were equipped to process Air Miles Cash. I later found out that Shell stations affiliated with Mac’s stores and Flying J’s did not accept Air Miles Cash.
That left Rona as the lone sponsor (aside from a sprinkling of independent Shell’s) that accepted Air Miles Cash in Alberta. I also lamented the fact that Ontario and Atlantic residents could redeem Air Miles for groceries at Sobeys and Metro, while Western Canadians had no option for groceries.
Related: Using Air Miles Cash
Air Miles eVoucher
That’s why I was excited to learn that Air Miles has introduced a new online eVoucher program with more reward partners to choose from. Here’s how it works:
Visit www.airmiles.ca/cash and you’ll see the list of sponsors in your province, including traditional Air Miles Cash sponsors like Shell and Rona where you can still redeem 95 miles for $10 off in-store.
You’ll also see new eVoucher sponsors, including Cineplex, iTunes, Starbucks, Hailo Taxi, and Safeway, to name a few.
To redeem an eVoucher, select a sponsor, click “Get e-Voucher”, then select the number of e-Vouchers you want and in what denomination. Then simply enter your email address and hit “continue” and Air Miles will email you a voucher for the selected sponsor.
An interesting new feature is that you can send Air Miles eVouchers to friends and family, which makes for an easy gift.
After redeeming, you’ll get an email with instructions on how to use your reward. This will vary by participating reward partner. The email will include either a printable eVoucher that can be used in-store at the retail location, a code to be used online, or the option to load your reward to the Reward Partner’s gift card.
Related: How Many Air Miles Do You Need For A Free Flight?
The new eVoucher feature gives more than two million Air Miles Cash collectors more options to redeem miles for useful items like groceries, gas, coffee, and even a night out at the movies.
That makes this Air Miles collector happy and willing to put forth a bit more effort into earning reward miles again.